Top Line Trends Improve Sequentially Throughout
the Quarter
Delivers Strong Operating Cash Flow
Strengthens Short Term Liquidity
Newell Brands (NASDAQ: NWL) today announced its second quarter
2020 financial results.
"We are encouraged by the current trends of our business,
including top line improvement throughout the quarter, very strong
consumption patterns in a number of our categories, and the
progress we are making against key tenets of our turnaround plan,
despite the challenging operating and economic environment caused
by the global coronavirus pandemic,” said Ravi Saligram, Newell
Brands President and CEO. “Three of eight business units delivered
core growth in the second quarter, eCommerce sales continued to
accelerate and the company as a whole delivered modest core sales
growth in the month of June. While the macros remain uncertain and
difficult, we continue to expect results in the back half of the
year to improve relative to the second quarter. We remain confident
in our liquidity position and our ability to successfully navigate
during these unprecedented times."
Chris Peterson, Chief Financial Officer and President, Business
Operations, said, “Newell's second quarter financial results,
although negatively impacted by the global pandemic, were ahead of
our internal expectations as we saw significant improvement in
trends from month to month during the quarter. Supply chain
conditions have improved significantly, with all manufacturing and
distribution centers currently open. We delivered operational
improvements across the enterprise in line with our turnaround
plan, including accelerated progress on SKU reduction, Project FUEL
productivity savings and overhead cost actions. Cash flow has
remained quite strong, with year to date operating cash flow
improving $141 million versus our year ago results, reflecting
strong progress on working capital initiatives.”
Second Quarter 2020 Executive
Summary
– Net sales were $2.1 billion, a decline of 14.9 percent
compared with the prior year period.
– Core sales declined 12.6 percent compared with the prior year
period. Three of eight business units delivered core sales
growth.
– Reported operating margin was 7.7 percent compared with 9.3
percent in the prior year period. Normalized operating margin was
10.2 percent compared with 12.2 percent in the prior year
period.
– Reported diluted earnings per share were $0.18 compared with
$0.21 per share in the prior year period.
– Normalized diluted earnings per share were $0.30 compared with
$0.43 per share in the prior year period.
– Year to date operating cash flow was $132 million compared
with an operating cash outflow of $9 million in the prior year
period, reflecting strong working capital progress.
– The company raised $500 million through the issuance of 4.875
percent senior notes maturing in June 2025.
– The company initiated a restructuring program to streamline
business operations and reduce overhead costs.
– Beginning in the second quarter of 2020, the company realigned
its management and segment reporting as a result of changes in its
organizational structure. The company now reports financial
information in five operating segments: Appliances & Cookware,
Commercial Solutions, Home Solutions, Learning & Development
and Outdoor & Recreation.
Second Quarter 2020 Operating
Results
Net sales were $2.1 billion, a 14.9 percent decline compared to
the prior year period, reflecting a 12.6 percent decrease in core
sales largely related to the business disruption caused by the
global COVID-19 pandemic as well as the unfavorable impact of
foreign exchange.
Reported gross margin was 31.5 percent compared with 34.9
percent in the prior year period, as fixed cost deleveraging,
unfavorable mix and headwinds from currency and inflation more than
offset the benefit from productivity. Normalized gross margin was
31.6 percent compared with 34.9 percent in the prior year
period.
Reported operating income was $163 million compared with
operating income of $231 million in the prior year period. Reported
operating margin was 7.7 percent compared with 9.3 percent in the
prior year period. Normalized operating income was $215 million, or
10.2 percent of sales, compared with $303 million, or 12.2 percent
of sales, in the prior year period.
Interest expense was $71 million compared with $78 million in
the prior year period, attributable to a reduction in outstanding
debt.
The company reported tax expense of $15 million compared with
$30 million in the prior year period, with a year over year
reduction in tax rate attributable to discrete tax benefits.
Normalized tax expense was $16 million compared with $59 million in
the prior year period.
The company reported net income of $78 million, or $0.18 diluted
earnings per share, compared with net income of $90 million, or
$0.21 diluted earnings per share, in the prior year period.
Normalized net income was $127 million, or $0.30 normalized
diluted earnings per share, compared with $182 million, or $0.43
normalized diluted earnings per share, in the prior year
period.
An explanation of non-GAAP measures and a reconciliation of
these non-GAAP results to comparable GAAP measures are included in
the tables attached to this release.
Balance Sheet and Cash
Flow
The company generated year to date operating cash flow of $132
million compared with an operating cash outflow of $9 million in
the prior year period, reflecting strong working capital
progress.
In May, the company issued $500 million in 4.875 percent senior
notes that mature in 2025. At the end of the second quarter, Newell
Brands had cash and cash equivalents of $619 million and total debt
outstanding of $6.2 billion. The company ended the quarter in a
strong liquidity position with over $2 billion in available
short-term liquidity, including cash on hand.
New Reporting Segments
In connection with changes in its organizational structure, the
company has realigned its management and segment reporting
beginning in the second quarter of 2020. The company currently
operates and reports financial and operating information in the
following five segments:
Segment
Business
Units Appliances & Cookware
Appliances & Cookware Commercial Solutions
Commercial, Connected
Home & Security Home Solutions
Home Fragrance, Food Learning & Development
Writing, Baby Outdoor
& Recreation Outdoor
& Recreation
Second Quarter 2020 Operating Segment
Results
The Appliances & Cookware segment generated net sales of
$359 million compared with $362 million in the year ago period,
reflecting a 6.1 percent increase in core sales offset by the
headwind from foreign exchange. Reported operating income was $10
million compared with $6 million in the prior year period. Reported
operating margin was 2.8 percent compared with 1.7 percent in the
prior year period. Normalized operating income was $13 million, or
3.6 percent of sales, versus $9 million, or 2.5 percent of sales,
in the prior year period.
The Commercial Solutions segment generated net sales of $413
million compared with $454 million in the prior year period,
reflecting a core sales decline of 6.8 percent and headwind from
foreign exchange. The Commercial business generated positive core
sales growth which was more than offset by a decline in Connected
Home & Security. Reported operating income was $40 million
compared with $53 million in the prior year period. Reported
operating margin was 9.7 percent compared with 11.7 percent in the
prior year period. Normalized operating income was $45 million, or
10.9 percent of sales, versus $60 million, or 13.2 percent of
sales, in the year-ago period.
The Home Solutions segment generated net sales of $355 million
compared with $372 million in the prior year period, due to a core
sales decline of 1.9 percent and the impact of unfavorable foreign
exchange. The Food business generated positive core sales growth
which was more than offset by a decline in Home Fragrance,
including the impact of the temporary closure of all North American
retail stores as a result of the COVID-19 pandemic. Reported
operating income was $29 million, or 8.2 percent of sales, compared
with $4 million, or 1.1 percent of sales, in the prior year period.
Normalized operating income was $46 million, or 13.0 percent of
sales, versus $16 million, or 4.3 percent of sales, in the prior
year period.
The Learning & Development segment generated net sales of
$631 million compared with $849 million in the prior year period,
reflecting a core sales decline of 23.5 percent and headwind from
foreign exchange. Core sales declined across both the Baby and
Writing businesses. Reported operating income was $126 million, or
20.0 percent of sales, compared with $217 million, or 25.6 percent
of sales, in the prior year period. Normalized operating income was
$129 million, or 20.4 percent of sales, compared with $221 million,
or 26.0 percent of sales, in the prior year period.
The Outdoor & Recreation segment generated net sales of $353
million compared with $443 million in the prior year period,
reflecting a core sales decline of 21.5 percent and the impact of
unfavorable foreign exchange. Reported operating income was $25
million, or 7.1 percent of sales, compared with $40 million, or 9.0
percent of sales, in the prior year period. Normalized operating
income was $33 million compared with $53 million in the prior year
period. Normalized operating margin was 9.3 percent compared with
12.0 percent in the prior year period.
COVID-19 Update
During the second quarter of 2020, Newell Brands continued to
experience COVID-19 related disruption to its business. The
headwinds were most prominent in April, with certain key business
trends improving sequentially since then during each consecutive
month. The three primary areas that were impacted by COVID-19
were:
- Supply chain. In the first half of
the second quarter, the company experienced significant supply
chain disruption. Of its 135 manufacturing and distribution
facilities, nearly 20 were temporarily closed, the most significant
of which were its South Deerfield, MA, Home Fragrance plant, its
Mexicali, Mexico, Writing facility, and its Juarez, Mexico,
Connected Home & Security facility, which were temporarily shut
down in line with government guidelines. Since that time, virtually
all manufacturing and distribution facilities have re-opened,
although the company continues to work to build inventory to
replace lost production during the period of downtime.
- Retail. While Newell Brands’
largest retail customers remained open and in fact experienced a
surge in sales, a number of secondary customers, primarily in the
specialty and department store channels, temporarily closed their
brick and mortar stores toward the end of the first quarter. These
dynamics, in combination with some retailers’ prioritization of
essential items in the early days of the pandemic, had a meaningful
negative impact on retailer order patterns. In addition, Newell
Brands temporarily closed its Yankee Candle retail stores in North
America in mid-March. As the national and global economy began to
re-open in the latter part of the second quarter, customer order
patterns began to return to a more normal cadence, with the
impacted retailers slowly reopening doors.
- Consumer demand patterns. Over the
course of the second quarter consumer demand patterns accelerated
for the organization as a whole, with higher sell-through at U.S.
retail customers on a year over year basis, driven by strong
consumer demand in the Food, Commercial and Appliances &
Cookware businesses, and more recently the Outdoor & Recreation
business. These trends have continued into July.
The ultimate impact of COVID-19 on the third quarter and full
year 2020 is unknown at this time, as it is difficult to predict
the trajectory and pace of the virus, the duration of social
distancing and shelter-in-place mandates, the timing of school and
office re-openings, and the timing and extent of economic recovery.
The company continues to expect that it will deliver sequentially
improved financial results in the back half of the year. Due to the
uncertain and highly dynamic outlook for the global economy,
however, the company is not issuing guidance for the third quarter
or full year 2020.
In the early days of the pandemic, Newell Brands focused on
three key priorities: safeguarding the health and well-being of its
employees, protecting profitability and operating cash flow, and
maintaining business continuity despite supply chain disruption.
While continuing to address these three issues, management's focus
has also pivoted to accelerating the turnaround plan, including SKU
count reduction, driving gross margin productivity through the
company's Project FUEL, taking swift and decisive actions to reduce
overhead costs, and applying even more rigorous discipline to
optimize working capital.
During the second quarter the company launched a restructuring
program to streamline business operations and reduce overhead
costs. The company recorded $8 million in charges associated with
the program in the second quarter and expects to record aggregate
charges of approximately $10 million in 2020.
Newell Brands is confident in its strong financial position and
believes it has sufficient flexibility to navigate through this
volatile period.
Executive Appointment
Christine Robins joined Newell Brands on June 15, 2020, in the
role of Business Unit CEO, Appliances & Cookware. Robins joins
the company from Char-Broil LLC, where she served as President and
Chief Executive Officer and led a strategic and operational
overhaul that included repositioning of its four key brands,
reinvigorated consumer-centric product innovation, go-to-market
differentiation and the launch of a European business. Previously
she served as President, Chief Executive Officer and Board member
of BodyMedia, a venture-backed pioneer of wearable health devices
and software applications. Robins also previously served as
President and Chief Executive Officer of Philips Oral Healthcare, a
division of Philips Electronics. She started her career at S.C.
Johnson where she spent almost twenty years in brand management and
category management.
Conference Call
Newell Brands’ second quarter 2020 earnings conference call will
be held today, July 31, at 11:00 a.m. ET. A link to the webcast is
provided under Events & Presentations in the Investors section
of the company’s website at www.newellbrands.com. A webcast replay
will be made available in the Quarterly Earnings section of the
company’s website.
Non-GAAP Financial
Measures
This release contains non-GAAP financial measures within the
meaning of Regulation G promulgated by the U.S. Securities and
Exchange Commission and includes a reconciliation of non-GAAP
financial measures to the most directly comparable financial
measures calculated in accordance with GAAP.
The company uses certain non-GAAP financial measures that are
included in this press release and the additional financial
information both to explain its results to stockholders and the
investment community and in the internal evaluation and management
of its businesses. The company’s management believes that these
non-GAAP financial measures and the information they provide are
useful to investors since these measures (a) permit investors to
view the company’s performance and liquidity using the same tools
that management uses to evaluate the company’s past performance,
reportable business segments, prospects for future performance and
liquidity, and (b) determine certain elements of management
incentive compensation.
The company’s management believes that core sales provides a
more complete understanding of underlying sales trends by providing
sales on a consistent basis as it excludes the impacts of
acquisitions, planned and completed divestitures, retail store
openings and closings, certain market exits, and changes in foreign
exchange from year-over-year comparisons. The effect of changes in
foreign exchange on reported sales is calculated by applying the
prior year average monthly exchange rates to the current year local
currency sales amounts (excluding acquisitions and divestitures),
with the difference between the 2020 reported sales and constant
currency sales presented as the foreign exchange impact increase or
decrease in core sales. The company’s management believes that
“normalized” gross margin, “normalized” operating income,
“normalized” operating margin, “normalized” net income,
“normalized” diluted earnings per share, “normalized” interest and
“normalized” tax benefits, which exclude restructuring and
restructuring-related expenses and one-time and other events such
as costs related to the extinguishment of debt, certain tax
benefits and charges, impairment charges, pension settlement
charges, divestiture costs, costs related to the acquisition,
integration and financing of acquired businesses, amortization of
acquisition-related intangible assets, inflationary adjustments,
expenses related to certain product recalls and certain other
items, are useful because they provide investors with a meaningful
perspective on the current underlying performance of the company’s
core ongoing operations and liquidity. On a pro forma basis,
"normalized" items give effect to the company's decision not to
sell the Commercial, Mapa and Quickie businesses.
The company determines the tax effect of the items excluded from
normalized diluted earnings per share by applying the estimated
effective rate for the applicable jurisdiction in which the pre-tax
items were incurred, and for which realization of the resulting tax
benefit, if any, is expected. In certain situations in which an
item excluded from normalized results impacts income tax expense,
the company utilizes a “with” and “without” approach to determine
normalized income tax benefit or expense. The company will also
exclude one-time tax expenses related to a change in tax status of
certain entities and the loss of GILTI tax credits as a result of
utilizing the 50% IRC Section 163(j) limit resulting from the CARES
Act to determine normalized income tax benefit.
While the company believes these non-GAAP financial measures are
useful in evaluating the company’s performance and liquidity, this
information should be considered as supplemental in nature and not
as a substitute for or superior to the related financial
information prepared in accordance with GAAP. Additionally, these
non-GAAP financial measures may differ from similar measures
presented by other companies.
About Newell Brands
Newell Brands (NASDAQ: NWL) is a leading global consumer goods
company with a strong portfolio of well-known brands, including
Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®,
Marmot®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid
Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®,
Rubbermaid®, Contigo®, First Alert®, Mapa®, Spontex® and Yankee
Candle®. For hundreds of millions of consumers, Newell Brands makes
life better every day, where they live, learn, work and play.
This press release and additional information about Newell
Brands are available on the company’s website, www.newellbrands.com.
Caution Concerning Forward-Looking
Statements
Some of the statements in this press release and its exhibits,
particularly those anticipating future financial performance,
business prospects, growth, operating strategies, the impact of the
COVID-19 pandemic and similar matters, are forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. These statements generally can be
identified by the use of words or phrases, including, but not
limited to, “intend,” “anticipate,” “believe,” “estimate,”
“project,” “target,” “plan,” “expect,” “setting up,” "beginning
to,” “will,” “should,” “would,” “resume,” “are confident that,”
"remains optimistic that," or similar statements. We caution that
forward-looking statements are not guarantees because there are
inherent difficulties in predicting future results. Actual results
may differ materially from those expressed or implied in the
forward-looking statements, including the impairment charges and
accounting for income taxes. Important factors that could cause
actual results to differ materially from those suggested by the
forward-looking statements include, but are not limited to:
- our ability to manage the demand, supply and operational
challenges with the actual or perceived effects of the COVID-19
pandemic;
- our dependence on the strength of retail, commercial and
industrial sectors of the economy in various countries around the
world;
- competition with other manufacturers and distributors of
consumer products;
- major retailers’ strong bargaining power and consolidation of
our customers;
- risks related to our substantial indebtedness, a potential
increase in interest rates or changes in our credit ratings;
- our ability to improve productivity, reduce complexity and
streamline operations;
- future events that could adversely affect the value of our
assets and/or stock price and require additional impairment
charges;
- our ability to remediate the material weakness in internal
control over financial reporting and to consistently maintain
effective internal control over financial reporting;
- our ability to develop innovative new products, to develop,
maintain and strengthen end-user brands and to realize the benefits
of increased advertising and promotion spend;
- the impact of costs associated with divestitures;
- our ability to effectively execute our turnaround plan;
- changes in the prices of raw materials and sourced products and
our ability to obtain raw materials and sourced products in a
timely manner;
- the impact of governmental investigations, inspections,
lawsuits, legislative requests or other actions by third
parties;
- the risks inherent to our foreign operations, including foreign
exchange fluctuations, exchange controls and pricing
restrictions;
- a failure of one of our key information technology systems,
networks, processes or related controls or those of our service
providers;
- the impact of U.S. and foreign regulations on our operations,
including the escalation of tariffs on imports into the U.S. and
exports to Canada, China and the European Union, environmental
remediation costs and data privacy regulations;
- the potential inability to attract, retain and motivate key
employees;
- the impact of new Treasury and tax regulations and the
resolution of tax contingencies resulting in additional tax
liabilities;
- product liability, product recalls or related regulatory
actions;
- our ability to protect intellectual property rights;
- significant increases in funding obligations related to our
pension plans; and
- other factors listed from time to time in our filings with the
Securities and Exchange Commission, including, but not limited to,
our Annual Report on Form 10-K and our Quarterly Reports on Form
10-Q.
The consolidated condensed financial statements are prepared in
conformity with accounting principles generally accepted in the
United States (“U.S. GAAP”). Management’s application of U.S. GAAP
requires the pervasive use of estimates and assumptions in
preparing the unaudited condensed consolidated financial
statements. As discussed above, the world is currently experiencing
the global COVID-19 pandemic which has required greater use of
estimates and assumptions in the preparation of our condensed
consolidated financial statements. Although we have made our best
estimates based upon current information, the effects of the
COVID-19 pandemic on our business may result in future changes to
management’s estimates and assumptions, especially if the severity
worsens or duration lengthens. Actual results may differ materially
from the estimates and assumptions developed by management. If so,
the company may be subject to future incremental impairment charges
as well as changes to recorded reserves and valuations.
The information contained in this press release and the tables
is as of the date indicated. The company assumes no obligation to
update any forward-looking statements as a result of new
information, future events or developments.
NEWELL BRANDS INC.
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (UNAUDITED)
(Amounts in millions, except per
share data)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
% Change
2020
2019
% Change
Net sales
$
2,111
$
2,480
(14.9)%
$
3,997
$
4,522
(11.6)%
Cost of products sold
1,447
1,615
2,716
3,002
Gross profit
664
865
(23.2)%
1,281
1,520
(15.7)%
Selling, general and administrative
expenses
488
612
(20.3)%
1,036
1,181
(12.3)%
Restructuring costs, net
8
8
10
19
Impairment of goodwill, intangibles and
other assets
5
14
1,480
77
Operating income (loss)
163
231
(29.4)%
(1,245)
243
NM
Non-operating expenses:
Interest expense, net
71
78
134
158
Other (income) expense, net
(1)
—
11
26
Income (loss) before income
taxes
93
153
(39.2)%
(1,390)
59
NM
Income tax provision (benefit)
15
30
(189)
10
Income (loss) from continuing
operations
78
123
(36.6)%
(1,201)
49
NM
Loss from discontinued operations, net of
tax
—
(33)
—
(110)
Net income (loss)
$
78
$
90
(13.3)%
$
(1,201)
$
(61)
NM
Weighted average common shares
outstanding:
Basic
424.2
423.3
424.0
423.3
Diluted
424.7
423.5
424.0
423.6
Earnings per share:
Basic:
Income (loss) from continuing
operations
$
0.18
$
0.29
$
(2.83)
$
0.12
Income (loss) from discontinued
operations
—
(0.08)
—
(0.26)
Net income (loss)
$
0.18
$
0.21
(14.3)%
$
(2.83)
$
(0.14)
NM
Diluted:
Income (loss) from continuing
operations
$
0.18
$
0.29
$
(2.83)
$
0.12
Income (loss) from discontinued
operations
—
(0.08)
—
(0.26)
Net income (loss)
$
0.18
$
0.21
(14.3)%
$
(2.83)
$
(0.14)
NM
Dividends per share
$
0.23
$
0.23
$
0.46
$
0.46
* NM - NOT MEANINGFUL
NEWELL BRANDS INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in millions)
June 30, 2020
December 31, 2019
Assets
Current assets
Cash and cash equivalents
$
619
$
349
Accounts receivable, net
1,641
1,842
Inventories
1,714
1,606
Prepaid expenses and other current
assets
312
313
Total current assets
4,286
4,110
Property, plant and equipment, net
1,118
1,155
Operating lease assets
553
615
Goodwill
3,496
3,709
Other intangible assets, net
3,561
4,916
Deferred income taxes
860
776
Other assets
383
361
TOTAL ASSETS
$
14,257
$
15,642
Liabilities and stockholders'
equity
Current liabilities
Accounts payable
$
1,157
$
1,102
Accrued compensation
159
204
Other accrued liabilities
1,199
1,340
Short-term debt and current portion of
long-term debt
402
332
Total current liabilities
2,917
2,978
Long-term debt
5,781
5,391
Deferred income taxes
471
625
Operating lease liabilities
494
541
Other noncurrent liabilities
1,078
1,111
Total liabilities
10,741
10,646
Stockholders' equity
Total stockholders' equity attributable to
parent
3,492
4,963
Total stockholders' equity attributable to
non-controlling interests
24
33
Total stockholders' equity
3,516
4,996
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
14,257
$
15,642
NEWELL BRANDS INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)
(Amounts in millions)
Six Months Ended June
30,
2020
2019
Cash flows from operating
activities:
Net loss
$
(1,201)
$
(61)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
176
174
Impairment of goodwill, intangibles and
other assets
1,480
189
Loss from sale of businesses, net
—
2
Deferred income taxes
(249)
(38)
Stock based compensation expense
18
20
Loss on change in fair value of
investments
1
18
Other, net
—
3
Changes in operating accounts excluding
the effects of divestitures:
Accounts receivable
138
75
Inventories
(145)
(295)
Accounts payable
71
41
Accrued liabilities and other
(157)
(137)
Net cash provided by (used in)
operating activities
132
(9)
Cash flows from investing
activities:
Proceeds from sale of divested
businesses
—
740
Capital expenditures
(94)
(115)
Other investing activities, net
6
(3)
Net cash provided by (used in)
investing activities
(88)
622
Cash flows from financing
activities:
Net payments of short term debt
(26)
(10)
Proceeds from issuance of debt, net of
debt issuance costs
493
—
Payments on current portion of long-term
debt
—
(268)
Payments on long-term debt
(18)
(5)
Loss on extinguishment of debt
—
(3)
Cash dividends
(197)
(195)
Equity compensation activity and other,
net
(13)
(5)
Net cash provided by (used in)
financing activities
239
(486)
Exchange rate effect on cash, cash
equivalents and restricted cash
(20)
2
Increase in cash, cash equivalents and
restricted cash
263
129
Cash, cash equivalents and restricted cash
at beginning of period
371
496
Cash, cash equivalents and restricted
cash at end of period
$
634
$
625
Supplemental disclosures:
Restricted cash at beginning of period
$
22
$
—
Restricted cash at end of period
15
—
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CERTAIN LINE ITEMS
(Amounts in millions, except per
share data)
Three Months Ended June 30,
2020
GAAP
Restructuring
Acquisition
Transactions
Non-GAAP
Measure
and restructuring
amortization and
and
Other
Measure
Reported
related costs [1]
impairment [2]
related costs [3]
items [4]
Normalized*
Net sales
$
2,111
$
—
$
—
$
—
$
—
$
2,111
Cost of products sold
1,447
(2)
—
—
(2)
1,443
Gross profit
664
2
—
—
2
668
31.5
%
31.6
%
Selling, general and administrative
expenses
488
(7)
(24)
(1)
(3)
453
23.1
%
21.5
%
Restructuring costs, net
8
(8)
—
—
—
—
Impairment of goodwill, intangibles and
other assets
5
—
(5)
—
—
—
Operating income
163
17
29
1
5
215
7.7
%
10.2
%
Non-operating (income) expense
70
1
—
(1)
2
72
Income before income taxes
93
16
29
2
3
143
Income tax provision [5]
15
—
1
—
—
16
Net income
$
78
$
16
$
28
$
2
$
3
$
127
Diluted earnings per share **
$
0.18
$
0.04
$
0.07
$
—
$
0.01
$
0.30
* Normalized results are financial measures that are not in
accordance with GAAP and exclude the above normalized adjustments.
See below for a discussion of each of these adjustments.
**Adjustments and normalized earnings per share are calculated
based on diluted weighted average shares of 424.7 million shares
for the three months ended June 30, 2020. Totals may not add due to
rounding.
[1]
Restructuring and restructuring related costs of $16
million.
[2]
Acquisition amortization costs of $24 million; $5 million of
non-cash impairment charges related to the operating leases of
Yankee Candle retail store business.
[3]
Divestiture costs of $1 million primarily related to
completed divestitures and loss on disposition of $1 million
related to the sale of the Gaming business.
[4]
Gain of $2 million due to changes in the fair value of
certain investments; $3 million of other charges, primarily related
to fees for certain legal proceedings; $1 million of other charges,
primarily related to product recall costs and Argentina
hyperinflationary adjustment of $1 million.
[5]
The Company determined the tax effect of the items excluded
from normalized results by applying the estimated effective rate
for the applicable jurisdiction in which the pre-tax items were
incurred, and for which realization of the resulting tax benefit,
if any, is expected. In certain situations in which an item
excluded from normalized results impacts income tax expense, the
Company uses a "with" and "without" approach to determine
normalized income tax expense.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CERTAIN LINE ITEMS
(Amounts in millions, except per
share data)
Three Months Ended June 30,
2019
GAAP
Restructuring
Acquisition
Transactions
Non-GAAP Measure
Measure
and restructuring
amortization and
and related
Other
Proforma
Reported
related costs [1]
impairment [2]
costs [3]
items [4]
Normalized*
Adjustments [5]
Proforma
Net sales
$
2,480
$
—
$
—
$
—
$
—
$
2,480
$
—
$
2,480
Cost of products sold
1,615
(3)
—
—
(7)
1,605
9
1,614
Gross profit
865
3
—
—
7
875
(9)
866
34.9
%
35.3
%
34.9
%
Selling, general and administrative
expenses
612
(6)
(32)
(9)
(3)
562
1
563
24.7
%
22.7
%
22.7
%
Restructuring costs, net
8
(8)
—
—
—
—
—
—
Impairment of goodwill, intangibles and
other assets
14
—
(14)
—
—
—
—
—
Operating income (loss)
231
17
46
9
10
313
(10)
303
9.3
%
12.6
%
12.2
%
Non-operating expense
78
—
—
—
—
78
—
78
Income (loss) before income
taxes
153
17
46
9
10
235
(10)
225
Income tax provision (benefit) [6]
30
5
9
2
15
61
(2)
59
Income (loss) from continuing
operations
123
12
37
7
(5)
174
(8)
166
Income (loss) from discontinued
operations, net of tax
(33)
—
—
45
4
16
—
16
Net income (loss)
$
90
$
12
$
37
$
52
$
(1)
$
190
$
(8)
$
182
Diluted earnings (loss) per share **
$
0.21
$
0.03
$
0.09
$
0.12
$
—
$
0.45
$
(0.02)
$
0.43
* Normalized results are financial measures that are not in
accordance with GAAP and exclude the above normalized adjustments.
See below for a discussion of each of these adjustments.
**Adjustments and normalized earnings per share are calculated
based on diluted weighted average shares of 423.5 million shares
for the three months ended June 30, 2019. Totals may not add due to
rounding.
[1]
Restructuring and restructuring related costs of $17
million.
[2]
Acquisition amortization costs of $32 million; impairment
charges of $14 million primarily related to goodwill and other
assets.
[3]
Divestiture costs of $11 million ($2 million of which is
reported in discontinued operations) primarily related to the
planned divestitures of The United States Playing Cards Company and
the recently completed divestitures of Process Solutions and Rexair
businesses; net loss on disposition of $7 million (reported in
discontinued operations) for working capital adjustments related to
the sale of the Waddington, Jostens and Fishing businesses (gain of
$9 million), loss of $22 million related to the disposition of
Process Solutions and gain of $6 million from the sale of Rexair
business.
[4]
Loss of $1 million due to changes in the fair value of
certain investments, negated by Argentina hyperinflationary
charges; $10 million of other charges, primarily related to fees
for certain legal proceedings, product recall costs and Argentina
hyperinflationary charges; and net tax adjustment of $12 million
primarily related to foreign and state tax impacts of offshore
earnings and a withholding tax refund received from Switzerland.
[5]
Depreciation and amortization expense related to the
Commercial Business, Mapa and Quickie that would have been recorded
had the businesses been continuously classified as held and used.
[6]
The Company determined the tax effect of the items excluded
from normalized results by applying the estimated effective rate
for the applicable jurisdiction in which the pre-tax items were
incurred, and for which realization of the resulting tax benefit,
if any, is expected. In certain situations in which an item
excluded from normalized results impacts income tax expense, the
Company uses a "with" and "without" approach to determine
normalized income tax expense.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CERTAIN LINE ITEMS
(Amounts in millions, except per
share data)
Six Months Ended June 30,
2020
GAAP
Restructuring
Acquisition
Transactions
Non-GAAP
Measure
and restructuring
amortization and
and
Other
Measure
Reported
related costs [1]
impairment [2]
related costs [3]
items [4]
Normalized*
Net sales
$
3,997
$
—
$
—
$
—
$
—
$
3,997
Cost of products sold
2,716
(2)
—
—
(4)
2,710
Gross profit
1,281
2
—
—
4
1,287
32.0
%
32.2
%
Selling, general and administrative
expenses
1,036
(11)
(55)
(2)
(9)
959
25.9
%
24.0
%
Restructuring costs, net
10
(10)
—
—
—
—
Impairment of goodwill, intangibles and
other assets
1,480
—
(1,480)
—
—
—
Operating income (loss)
(1,245)
23
1,535
2
13
328
(31.1)
%
8.2
%
Non-operating (income) expense
145
1
—
—
(3)
143
Income (loss) before income
taxes
(1,390)
22
1,535
2
16
185
Income tax provision (benefit) [5]
(189)
1
230
—
(23)
19
Net income (loss)
$
(1,201)
$
21
$
1,305
$
2
$
39
$
166
Diluted earnings (loss) per share **
$
(2.83)
$
0.05
$
3.07
$
—
$
0.09
$
0.39
* Normalized results are financial measures that are not in
accordance with GAAP and exclude the above normalized adjustments.
See below for a discussion of each of these adjustments.
**Adjustments and normalized earnings per share are calculated
based on diluted weighted average shares of 424.8 million shares
for the six months ended June 30, 2020. Totals may not add due to
rounding.
[1]
Restructuring and restructuring related costs of $22
million.
[2]
Acquisition amortization costs of $55 million; impairment
charges of $1.5 billion related to goodwill, other intangible
assets and other assets.
[3]
Divestiture costs of $2 million primarily related to
completed divestitures.
[4]
Loss of $1 million due to changes in the fair value of
certain investments; Argentina hyperinflationary adjustment of $3
million; $9 million of other charges, primarily related to fees for
certain legal proceedings; $2 million of other charges, primarily
related to product recall costs and $1 million loss on pension
settlement. Includes income tax expense of $20 million related
change in tax status of certain entities and $5 million for effects
of adopting the Coronavirus Aid, Relief, and Economic Security
(“CARES”) Act.
[5]
The Company determined the tax effect of the items excluded
from normalized results by applying the estimated effective rate
for the applicable jurisdiction in which the pre-tax items were
incurred, and for which realization of the resulting tax benefit,
if any, is expected. In certain situations in which an item
excluded from normalized results impacts income tax expense, the
Company uses a "with" and "without" approach to determine
normalized income tax expense.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CERTAIN LINE ITEMS
(Amounts in millions, except per
share data)
Six Months Ended June 30,
2019
GAAP
Restructuring
Acquisition
Transactions
Non-GAAP Measure
Measure
and restructuring
amortization and
and related
Other
Proforma
Reported
related costs [1]
impairment [2]
costs [3]
items [4]
Normalized*
Adjustments [5]
Proforma
Net sales
$
4,522
$
—
$
—
$
—
$
—
$
4,522
$
—
$
4,522
Cost of products sold
3,002
(4)
—
—
(8)
2,990
19
3,009
Gross profit
1,520
4
—
—
8
1,532
(19)
1,513
33.6
%
33.9
%
33.5
%
Selling, general and administrative
expenses
1,181
(12)
(65)
(16)
(4)
1,084
2
1,086
26.1
%
24.0
%
24.0
%
Restructuring costs, net
19
(19)
—
—
—
—
—
—
Impairment of goodwill, intangibles and
other assets
77
—
(77)
—
—
—
—
—
Operating income (loss)
243
35
142
16
12
448
(21)
427
5.4
%
9.9
%
9.4
%
Non-operating (income) expense
184
—
—
—
(21)
163
—
163
Income (loss) before income
taxes
59
35
142
16
33
285
(21)
264
Income tax provision (benefit) [6]
10
12
22
5
19
68
(5)
63
Income (loss) from continuing
operations
49
23
120
11
14
217
(16)
201
Income (loss) from discontinued
operations, net of tax
(110)
—
84
40
20
34
—
34
Net income (loss)
$
(61)
$
23
$
204
$
51
$
34
$
251
$
(16)
$
235
Diluted earnings (loss) per share **
$
(0.14)
$
0.05
$
0.48
$
0.12
$
0.08
$
0.59
$
(0.04)
$
0.55
* Normalized results are financial measures that are not in
accordance with GAAP and exclude the above normalized adjustments.
See below for a discussion of each of these adjustments.
**Adjustments and normalized earnings per share are calculated
based on diluted weighted average shares of 423.6 million shares
for the six months ended June 30, 2019. Totals may not add due to
rounding.
[1]
Restructuring and restructuring related costs of $35
million.
[2]
Acquisition amortization costs of $65 million; impairment
charges of $189 million ($112 million reported in discontinued
operations) primarily related to goodwill, intangible assets and
other assets.
[3]
Divestiture costs of $19 million ($4 million of which is
reported in discontinued operations) primarily related to the
planned divestitures of The United States Playing Cards Company and
Process Solutions businesses and acquisition related costs of $1
million; net loss on disposition of $2 million (reported in
discontinued operations) for working capital adjustments related to
the sale of the Waddington, Jostens and Fishing businesses (gain of
$14 million), loss of $22 million related to the disposition of
Process Solutions and gain of $6 million from the sale of Rexair
business.
[4]
Loss of $18 million due to changes in the fair value of
certain investments; Argentina hyperinflationary adjustment of $5
million; $10 million of other charges, primarily related to fees
for certain legal proceedings and product recall costs and net tax
adjustment of $8 million primarily related to foreign and state tax
impacts of offshore earnings and a withholding tax refund from
Switzerland.
[5]
Depreciation and amortization expense related to the
Commercial Business and the Mapa and Quickie businesses that would
have been recorded had the businesses been continuously classified
as held and used.
[6]
The Company determined the tax effect of the items excluded
from normalized results by applying the estimated effective rate
for the applicable jurisdiction in which the pre-tax items were
incurred, and for which realization of the resulting tax benefit,
if any, is expected. In certain situations in which an item
excluded from normalized results impacts income tax expense, the
Company uses a "with" and "without" approach to determine
normalized income tax expense.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
Three Months Ended June 30,
2020
Three Months Ended June 30,
2019
Year over year changes
Reported
Reported
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Proforma
Operating
Operating
Excluded
Operating
Operating
Operating
Operating
Excluded
Operating
Operating
Net Sales
Operating Income
Net Sales
Income (Loss)
Margin
Items [1]
Income (Loss)
Margin
Net Sales
Income (Loss)
Margin
Items [2] [3]
Income (Loss) [3]
Margin [3]
$
%
$
%
APPLIANCES AND COOKWARE
$
359
$
10
2.8
%
$
3
$
13
3.6
%
$
362
$
6
1.7
%
$
3
$
9
2.5
%
$
(3)
(0.8)
%
$
4
44.4
%
COMMERCIAL SOLUTIONS
413
40
9.7
%
5
45
10.9
%
454
53
11.7
%
7
60
13.2
%
(41)
(9.0)
%
(15)
(25.0)
%
HOME SOLUTIONS
355
29
8.2
%
17
46
13.0
%
372
4
1.1
%
12
16
4.3
%
(17)
(4.6)
%
30
187.5
%
LEARNING AND DEVELOPMENT
631
126
20.0
%
3
129
20.4
%
849
217
25.6
%
4
221
26.0
%
(218)
(25.7)
%
(92)
(41.6)
%
OUTDOOR AND RECREATION
353
25
7.1
%
8
33
9.3
%
443
40
9.0
%
13
53
12.0
%
(90)
(20.3)
%
(20)
(37.7)
%
CORPORATE
—
(59)
—
%
8
(51)
—
%
—
(81)
—
%
25
(56)
—
%
—
—
%
5
8.9
%
RESTRUCTURING
—
(8)
—
%
8
—
—
%
—
(8)
—
%
8
—
—
%
—
—
%
—
—
%
$
2,111
$
163
7.7
%
$
52
$
215
10.2
%
$
2,480
$
231
9.3
%
$
72
$
303
12.2
%
$
(369)
(14.9)
%
$
(88)
(29.0)
%
[1]
The three months ended June 30,
2020 excluded items consist of $24 million of acquisition
amortization costs; $17 million of restructuring and
restructuring-related charges; $5 million of non-cash impairment
charges related to the operating leases of Yankee Candle retail
store business; other charges of $5 million, primarily related to
product recall costs, Argentina hyperinflationary adjustment and
fees for certain legal proceedings and $1 million of
transaction-related costs.
[2]
The three months ended June 30,
2019 excluded items consist of $32 million of acquisition
amortization costs; $17 million of restructuring and
restructuring-related charges; $14 million of impairment charges
for goodwill and other assets; other charges of $10 million,
primarily related to Argentina hyperinflationary adjustment, fees
for certain legal proceedings and product recall costs and $9
million of transaction related costs.
[3]
Normalized proforma operating
income (loss) and margin reflect an adjustment within excluded
items for depreciation and amortization expense of $10 million
related to Commercial Business, and the Mapa and Quickie businesses
in the Commercial Solutions segment that would have been recorded
had they been continuously classified as held and used for the
three months ended June 30, 2019.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
Six Months Ended June 30,
2020
Six Months Ended June 30,
2019
Year over year changes
Reported
Reported
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Proforma Operating
Operating
Operating
Excluded
Operating
Operating
Operating
Operating
Excluded
Operating
Operating
Net Sales
Income (Loss)
Net Sales
Income (Loss)
Margin
Items [1]
Income (Loss)
Margin
Net Sales
Income (Loss)
Margin
Items [2] [3]
Income (Loss) [3]
Margin [3]
$
%
$
%
APPLIANCES AND COOKWARE
$
650
$
(298)
(45.8)
%
$
304
$
6
0.9
%
$
692
$
2
0.3
%
$
5
$
7
1.0
%
$
(42)
(6.1)
%
$
(1)
(14.3)
%
COMMERCIAL SOLUTIONS
826
(232)
(28.1)
%
328
96
11.6
%
868
45
5.2
%
64
109
12.6
%
(42)
(4.8)
%
(13)
(11.9)
%
HOME SOLUTIONS
702
(262)
(37.3)
%
322
60
8.5
%
743
(1)
(0.1)
%
25
24
3.2
%
(41)
(5.5)
%
36
150.0
%
LEARNING AND DEVELOPMENT
1,159
131
11.3
%
84
215
18.6
%
1,430
306
21.4
%
9
315
22.0
%
(271)
(19.0)
%
(100)
(31.7)
%
OUTDOOR AND RECREATION
660
(449)
(68.0)
%
497
48
7.3
%
789
52
6.6
%
20
72
9.1
%
(129)
(16.3)
%
(24)
(33.3)
%
CORPORATE
—
(125)
—
%
28
(97)
—
%
—
(142)
—
%
42
(100)
—
%
—
—
%
3
3.0
%
RESTRUCTURING
—
(10)
—
%
10
—
—
%
—
(19)
—
%
19
—
—
%
—
—
%
—
—
%
$
3,997
$
(1,245)
(31.1)
%
$
1,573
$
328
8.2
%
$
4,522
$
243
5.4
%
$
184
$
427
9.4
%
$
(525)
(11.6)
%
$
(99)
(23.2)
%
[1]
The six months ended June 30, 2020 excluded items consist of
$1.5 billion of impairment charges primarily for goodwill,
intangible assets and other assets; $55 million of acquisition
amortization costs; $23 million of restructuring and
restructuring-related charges; other charges of $13 million,
primarily related to product recall costs, Argentina
hyperinflationary adjustment and fees for certain legal proceedings
and $2 million of transaction-related costs.
[2]
The six months ended June 30, 2019 excluded items consist of
$77 million of impairment charges for goodwill and other assets;
$65 million of acquisition amortization costs; $35 million of
restructuring and restructuring-related charges; $16 million of
transaction-related costs and other charges of $12 million,
primarily related to Argentina hyperinflationary adjustment, fees
for certain legal proceedings and product recall costs.
[3]
Normalized proforma operating income (loss) and margin
reflect an adjustment within excluded items for depreciation and
amortization expense of $21 million related to Commercial Business,
and the Mapa and Quickie businesses in the Commercial Solutions
segment that would have been recorded had they been continuously
classified as held and used for the six months ended June 30, 2019.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CORE SALES ANALYSIS BY
SEGMENT
(Amounts in millions)
Three Months Ended June 30,
2020
Three Months Ended June 30,
2019
Increase (Decrease) Core
Sales
2020 Net Sales (REPORTED)
Acquisitions, Divestitures and
Other, Net [2]
Net Sales Base Business
Currency Impact [3]
2020 Core Sales [1]
2019 Net Sales (REPORTED)
Divestitures and Other, Net
[2]
2019 Core Sales [1]
$
%
APPLIANCES AND COOKWARE
$
359
$
—
$
359
$
25
$
384
$
362
$
—
$
362
$
22
6.1
%
COMMERCIAL SOLUTIONS
413
—
413
10
423
454
—
454
(31)
(6.8)
%
HOME SOLUTIONS
355
—
355
3
358
372
(7)
365
(7)
(1.9)
%
LEARNING AND DEVELOPMENT
631
(1)
630
7
637
849
(16)
833
(196)
(23.5)
%
OUTDOOR AND RECREATION
353
1
354
4
358
443
13
456
(98)
(21.5)
%
$
2,111
$
—
$
2,111
$
49
$
2,160
$
2,480
$
(10)
$
2,470
$
(310)
(12.6)
%
CORE SALES ANALYSIS BY
GEOGRAPHY
Three Months Ended June 30,
2020
Three Months Ended June 30,
2019
Increase (Decrease) Core
Sales
2020 Net Sales (REPORTED)
Acquisitions, Divestitures and
Other, Net [2]
Net Sales Base Business
Currency Impact [3]
2020 Core Sales [1]
2019 Net Sales (REPORTED)
Divestitures and Other, Net
[2]
2019 Core Sales [1]
$
%
NORTH AMERICA
$
1,535
$
—
$
1,535
$
3
$
1,538
$
1,768
$
(10)
$
1,758
$
(220)
(12.5)
%
EUROPE, MIDDLE EAST, AFRICA
299
—
299
7
306
360
—
360
(54)
(15.0)
%
LATIN AMERICA
129
—
129
37
166
166
—
166
—
—
%
ASIA PACIFIC
148
—
148
2
150
186
—
186
(36)
(19.4)
%
$
2,111
$
—
$
2,111
$
49
$
2,160
$
2,480
$
(10)
$
2,470
$
(310)
(12.6)
%
[1]
"Core Sales” provides a consistent basis for year-over-year
comparisons in sales as it excludes the impacts of acquisitions,
completed divestitures, retail store openings and closings, changes
in foreign currency.
[2]
Divestitures include the exit of the North American
distributorship of Uniball® Products and, consistent with standard
retail practice, current and prior period net sales from retail
store closures.
[3]
“Currency Impact” represents the effect of foreign currency
on 2020 reported sales and is calculated as the difference between
the 2020 reported sales and by applying the prior year average
monthly exchange rates to the current year local currency sales
amounts (excluding acquisitions and divestitures).
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
CORE SALES ANALYSIS BY
SEGMENT
(Amounts in millions)
Six Months Ended June 30,
2020
Six Months Ended June 30,
2019
Increase (Decrease) Core
Sales
2020 Net Sales (REPORTED)
Acquisitions, Divestitures and
Other, Net [2]
Net Sales Base Business
Currency Impact [3]
2020 Core Sales [1]
2019 Net Sales (REPORTED)
Divestitures and Other, Net
[2]
2019 Core Sales [1]
$
%
APPLIANCES AND COOKWARE
$
650
$
—
$
650
$
36
$
686
$
692
$
—
$
692
$
(6)
(0.9)
%
COMMERCIAL SOLUTIONS
826
—
826
18
844
868
—
868
(24)
(2.8)
%
HOME SOLUTIONS
702
(1)
701
6
707
743
(13)
730
(23)
(3.2)
%
LEARNING AND DEVELOPMENT
1,159
(4)
1,155
14
1,169
1,430
(34)
1,396
(227)
(16.3)
%
OUTDOOR AND RECREATION
660
1
661
8
669
789
13
802
(133)
(16.6)
%
$
3,997
$
(4)
$
3,993
$
82
$
4,075
$
4,522
$
(34)
$
4,488
$
(413)
(9.2)
%
CORE SALES ANALYSIS BY
GEOGRAPHY
Six Months Ended June 30,
2020
Six Months Ended June 30,
2019
Increase (Decrease) Core
Sales
2020 Net Sales (REPORTED)
Acquisitions, Divestitures and
Other, Net [2]
Net Sales Base Business
Currency Impact [3]
2020 Core Sales [1]
2019 Net Sales (REPORTED)
Divestitures and Other, Net
[2]
2019 Core Sales [1]
$
%
NORTH AMERICA
$
2,854
$
(4)
$
2,850
$
4
$
2,854
$
3,176
$
(32)
$
3,144
$
(290)
(9.2)
%
EUROPE, MIDDLE EAST, AFRICA
600
—
600
15
615
684
(1)
683
(68)
(10.0)
%
LATIN AMERICA
264
—
264
58
322
312
(1)
311
11
3.5
%
ASIA PACIFIC
279
—
279
5
284
350
—
350
(66)
(18.9)
%
$
3,997
$
(4)
$
3,993
$
82
$
4,075
$
4,522
$
(34)
$
4,488
$
(413)
(9.2)
%
[1]
“Core Sales” provides a
consistent basis for year-over-year comparisons in sales as it
excludes the impacts of acquisitions, completed divestitures,
retail store openings and closings, changes in foreign
currency.
[2]
Divestitures include the exit of
the North American distributorship of Uniball® Products and,
consistent with standard retail practice, current and prior period
net sales from retail store closures.
[3]
“Currency Impact” represents the
effect of foreign currency on 2020 reported sales and is calculated
as the difference between the 2020 reported sales and by applying
the prior year average monthly exchange rates to the current year
local currency sales amounts (excluding acquisitions and
divestitures).
NEWELL BRANDS INC.
RECONCILIATION OF GAAP
AND NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the three months ended
March 31, 2019
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [1] [2]
(Loss)
Margin
APPLIANCES AND COOKWARE
$
330
$
(4
)
(1.2
)%
$
2
$
(2
)
(0.6
)%
COMMERCIAL SOLUTIONS
414
(8
)
(1.9
)%
57
49
11.8
%
HOME SOLUTIONS
371
(5
)
(1.3
)%
13
8
2.2
%
LEARNING AND DEVELOPMENT
581
89
15.3
%
5
94
16.2
%
OUTDOOR AND RECREATION
346
12
3.5
%
7
19
5.5
%
CORPORATE
—
(61
)
—
%
17
(44
)
—
%
RESTRUCTURING
—
(11
)
—
%
11
—
—
%
$
2,042
$
12
0.6
%
$
112
$
124
6.1
%
1.
Excluded items consist of $63
million of impairment charges for goodwill; $33 million of
acquisition amortization costs; $18 million of restructuring and
restructuring-related charges; $7 million of transaction-related
costs and other charges of $2 million, primarily related to
Argentina hyperinflationary adjustment and fees for certain legal
proceedings.
2.
Normalized proforma operating
income (loss) and margin reflect an adjustment within excluded
items for depreciation and amortization expense of $11 million
related to the Rubbermaid Outdoor, Closet, Refuse, Garage and
Cleaning businesses (the “Commercial Business”) and the Mapa and
Quickie businesses in the Commercial Solutions segment that would
have been recorded had they been continuously classified as held
and used.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the three months ended
June 30, 2019
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [3] [4]
(Loss)
Margin
APPLIANCES AND COOKWARE
$
362
$
6
1.7
%
$
3
$
9
2.5
%
COMMERCIAL SOLUTIONS
454
53
11.7
%
7
60
13.2
%
HOME SOLUTIONS
372
4
1.1
%
12
16
4.3
%
LEARNING AND DEVELOPMENT
849
217
25.6
%
4
221
26.0
%
OUTDOOR AND RECREATION
443
40
9.0
%
13
53
12.0
%
CORPORATE
—
(81
)
—
%
25
(56
)
—
%
RESTRUCTURING
—
(8
)
—
%
8
—
—
%
$
2,480
$
231
9.3
%
$
72
$
303
12.2
%
3.
Excluded items consist of $32 million of acquisition
amortization costs; $17 million of restructuring and
restructuring-related charges; $14 million of impairment charges
for goodwill and other assets; other charges of $10 million,
primarily related to Argentina hyperinflationary adjustment, fees
for certain legal proceedings and product recall costs and $9
million of transaction-related costs.
4.
Normalized proforma operating income (loss) and margin
reflect an adjustment within excluded items for depreciation and
amortization expense of $10 million related to Commercial Business,
and the Mapa and Quickie businesses in the Commercial Solutions
segment that would have been recorded had they been continuously
classified as held and used.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the three months ended
September 30, 2019
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [5] [6]
(Loss)
Margin
APPLIANCES AND COOKWARE
430
(595
)
(138.4
)%
613
18
4.2
%
COMMERCIAL SOLUTIONS
475
(216
)
(45.5
)%
285
69
14.5
%
HOME SOLUTIONS
484
(112
)
(23.1
)%
172
60
12.4
%
LEARNING AND DEVELOPMENT
824
182
22.1
%
8
190
23.1
%
OUTDOOR AND RECREATION
356
(41
)
(11.5
)%
78
37
10.4
%
CORPORATE
—
(72
)
—
%
25
(47
)
—
%
RESTRUCTURING
—
(3
)
—
%
3
—
—
%
$
2,569
$
(857
)
(33.4
)%
$
1,184
$
327
12.7
%
5.
Excluded items consist of $1.1
billion of impairment charges for goodwill, intangible assets and
other assets; cumulative depreciation and amortization catch-up of
$40 million; $32 million of acquisition amortization costs; $28
million of restructuring and restructuring-related charges; $9
million of transaction-related costs and other charges of $6
million, primarily related to Argentina hyperinflationary
adjustment, fees for certain legal proceedings and product recall
costs.
6.
Normalized proforma operating
income (loss) and margin reflect an adjustment within excluded
items for depreciation and amortization expense of $2 million
related to the Mapa and Quickie businesses in the Commercial
Solutions segment that would have been recorded had they been
continuously classified as held and used.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the three months ended
December 31, 2019
Reported
Reported
Normalized
Normalized
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [7]
(Loss)
Margin
APPLIANCES AND COOKWARE
570
58
10.2
%
(4
)
54
9.5
%
COMMERCIAL SOLUTIONS
436
35
8.0
%
16
51
11.7
%
HOME SOLUTIONS
648
96
14.8
%
16
112
17.3
%
LEARNING AND DEVELOPMENT
702
99
14.1
%
29
128
18.2
%
OUTDOOR AND RECREATION
268
(74
)
(27.6
)%
72
(2
)
(0.7
)%
CORPORATE
—
(77
)
—
%
29
(48
)
—
%
RESTRUCTURING
—
(5
)
—
%
5
—
—
%
2,624
132
5.0
%
163
295
11.2
%
7.
Excluded items consist of $75
million of impairment charges for goodwill, intangible assets and
other assets; $34 million of acquisition amortization costs; $19
million of restructuring and restructuring-related charges;
cumulative depreciation and amortization catch-up of $15 million;
other charges of $15 million, primarily related to Argentina
hyperinflationary adjustment, fees for certain legal proceedings
and product recall costs and $5 million of transaction-related
costs.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the twelve months ended
December 31, 2019
Normalized
Normalized
Reported
Reported
Proforma
Proforma
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [8] [9]
(Loss)
Margin
APPLIANCES AND COOKWARE
1,692
(535
)
(31.6
)%
614
79
4.7
%
COMMERCIAL SOLUTIONS
1,779
(136
)
(7.6
)%
365
229
12.9
%
HOME SOLUTIONS
1,875
(17
)
(0.9
)%
213
196
10.5
%
LEARNING AND DEVELOPMENT
2,956
587
19.9
%
46
633
21.4
%
OUTDOOR AND RECREATION
1,413
(63
)
(4.5
)%
170
107
7.6
%
CORPORATE
—
(291
)
—
%
96
(195
)
—
%
RESTRUCTURING
—
(27
)
—
%
27
—
—
%
$
9,715
$
(482
)
(5.0
)%
$
1,531
$
1,049
10.8
%
8.
Excluded items consist of $1.2
billion of impairment charges for goodwill, intangible assets and
other assets; $131 million of acquisition amortization costs; $82
million of restructuring and restructuring-related charges;
cumulative depreciation and amortization catch-up of $55 million;
other charges of $33 million, primarily related to Argentina
hyperinflationary adjustment, fees for certain legal proceedings
and product recall costs and $30 million of transaction-related
costs.
9.
Normalized proforma operating
income (loss) and margin reflect an adjustment within excluded
items for depreciation and amortization expense of $23 million
related to Commercial Business, and the Mapa and Quickie businesses
in the Commercial Solutions segment that would have been recorded
had they been continuously classified as held and used.
NEWELL BRANDS INC.
RECONCILIATION OF GAAP AND
NON-GAAP INFORMATION (UNAUDITED)
FINANCIAL WORKSHEET - SEGMENT
REPORTING
(Amounts in millions)
For the three months ended
March 31, 2020
Reported
Reported
Normalized
Normalized
Operating Income
Operating
Excluded
Operating Income
Operating
Net Sales
(Loss)
Margin
Items [10]
(Loss)
Margin
APPLIANCES AND COOKWARE
291
(308
)
(105.8
)%
301
(7
)
(2.4
)%
COMMERCIAL SOLUTIONS
413
(272
)
(65.9
)%
323
51
12.3
%
HOME SOLUTIONS
347
(291
)
(83.9
)%
305
14
4.0
%
LEARNING AND DEVELOPMENT
528
5
0.9
%
81
86
16.3
%
OUTDOOR AND RECREATION
307
(474
)
(154.4
)%
489
15
4.9
%
CORPORATE
—
(66
)
—
%
20
(46
)
—
%
RESTRUCTURING
—
(2
)
—
%
2
—
—
%
$
1,886
$
(1,408
)
(74.7
)%
$
1,521
$
113
6.0
%
10.
Excluded items consist of $1.5 billion of impairment charges
for goodwill, intangible assets and other assets; $31 million of
acquisition amortization costs; $6 million of restructuring and
restructuring-related charges; other charges of $8 million,
primarily related to Argentina hyperinflationary adjustment,
product recall costs and fees for certain legal proceedings and $1
million of transaction-related costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200731005128/en/
Investor Contact: Nancy
O’Donnell SVP, Investor Relations & Corporate Communications +1
(770) 418-7723 nancy.odonnell@newellco.com Media Contact: Danielle Clark Senior Manager,
External Communications +1 (404) 783-0419
danielle.clark@newellco.com
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